Project #6981 - Decision Science

The director of career advising at Orange Community College wants to use decision analysis to provide information to help students decide which 2-year degree program they should pursue. The director has set up the following payoff table for six of the most popular and successful degree programs at OCC that shows the estimated 5-year gross income ($) from each degree for four future economic conditions:

 

Degree Program

Economic Conditions

Recession

Average

Good

Robust

Graphic Design

145,000

175,000

220,000

260,000

Nursing

150,000

180,000

205,000

215,000

Real Estate

115,000

165,000

220,000

320,000

Medical Tech

130,000

180,000

210,000

280,000

Culinary Tech

115,000

145,000

235,000

305,000

Computer IT

125,000

150,000

190,000

250,000

Probability

0.2

0.4

0.3

0.1

 

Determine the best degree program in terms of projected income, using the following decision criteria:

a.       Maximax

b.      Maximin

c.       Equal likelihood

d.      Hurwicz (alpha = .6)

e.      Minimax regret

f.        EOL (expected opportunity loss)

g.       The director of career advising at Orange Community College has paid a small fee to a local investment firm to indicate a probability for each future economic condition over the next 5 years, which is shown in the last row of the above table. Using expected value determine the best degree program in terms of projected income.

 

h.      Determine the EVPI of this problem.

 

 

 

 

Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership. They have three offers: from a foreign compact car company, from a U.S.-producer of full-sized cars, and from a truck company. The success of each type of dealership will depend on how much gasoline is going to be available during the next few years. The profit from each type of dealership, given the availability of gas, is shown in the following payoff table:

 

Dealership

Gasoline Availability

Shortage (0.6)

Surplus (0.4)

Compact cars

$300,000

$150,000

Full-sized cars

-100,000

600,000

Trucks

120,000

170,000

 

The Friendlys are considering hiring a petroleum analyst to determine the future availability of gasoline. The analyst will report that either a shortage or a surplus will occur. The probability that the analyst will indicate a shortage, given that a shortage actually occurs is .90; the probability that the analyst will indicate a surplus, given that a surplus actually occurs is .70.

 

a.       Construct a decision tree to determine the optimal strategy for Friendlys using TreePlan in Excel.

b.      Determine the maximum amount the Friendlys should pay for the analyst’s services. (EVSI)

c.       Compute the efficiency of the sample information for the Friendly car dealership.

 

 

Subject Mathematics
Due By (Pacific Time) 05/29/2013 06:00 pm
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy